Tariffs for Payments to State Extra-Budgetary Funds in 2012-2013.

13.12.2011

Legal Update No. 300

Goltsblat BLP advises that Federal Law No. 379-FZ of 3 December 2011 “On Amendments to Certain Legislative Acts of the Russian Federation Pertaining to Tariffs for Insurance Payments to State Extra-Budgetary Funds” (the Federal Law) was adopted and will come into effect on 1 January 2012.

The Federal Law introduces the following essential amendments to the legislation on insurance payments to the state extra-budgetary funds:

1. The maximum tariff for insurance payments for the bulk of taxpayers will go down from 34% to 30% in 2012-2013, of which:

  • 22% is payable to the Pension Fund of the Russian Federation;
  • 2.9% is payable to the Social Insurance Fund of the Russian Federation; and
  • 5.1% is payable to the Federal Compulsory Medical Insurance Fund.

These tariffs apply to a chargeable base of up to RUB 512 thousand in 2012 and up to RUB 573 thousand in 2013. Any amounts over and above these ceilings will be charged for the purposes of insurance payments at 10% (no such charge is now payable).

2. The maximum tariff for privileged payers is reduced to 20%. The Federal Law also extends the list of privileged insured companies to cover entities and individual entrepreneurs applying the simplified taxation scheme and classed as:

  • not-for-profit organisations engaged in social services, scientific research and development;
  • charities;
  • pharmacies;
  • transportation and communications entities; and
  • engineering service providers (other than entities contracted for technology development by SEZ management bodies).

3. Insurance payments to the Pension Fund of Russia will also be compulsory by foreign citizens and stateless individuals temporarily residing in the Russian Federation and working under employment contracts agreed for an indefinite term or a fixed term of at least six months. This does not, however, apply to highly qualified specialists.

4. The Federal Law removes ambiguity on whether CEOs who are sole participants in (founders of) entities and owners of their assets should be included in the list of policy holders who are subject to compulsory pension insurance. Although this used to be a matter of debate, these persons are now recognised as policy holders along with other employees.

For additional information, please contact:

to Andrey Shpak,
Partner, Tax consulting/ tax litigation,
Goltsblat BLP
T: +7 (495) 287 44 44,
E: info@gblplaw.com

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